chapter 17 designing and managing value networks and marketing channels by l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Chapter 17 Designing and Managing Value Networks and Marketing Channels by PowerPoint Presentation
Download Presentation
Chapter 17 Designing and Managing Value Networks and Marketing Channels by

Loading in 2 Seconds...

play fullscreen
1 / 40

Chapter 17 Designing and Managing Value Networks and Marketing Channels by - PowerPoint PPT Presentation


  • 366 Views
  • Uploaded on

Chapter 17 Designing and Managing Value Networks and Marketing Channels by. Kotler on Marketing. Establish channels for different target markets and aim for efficiency, control, and adaptability. Chapter Objectives.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Chapter 17 Designing and Managing Value Networks and Marketing Channels by' - Sharon_Dale


Download Now An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
kotler on marketing
Kotler on Marketing

Establish channels for different target markets and aim for efficiency, control, and adaptability.

chapter objectives
Chapter Objectives
  • In this chapter, we focus on the following channel questions from the viewpoint of the manufacturers:
    • What is the value network and marketing channel system?
    • What work is performed by marketing channels?
    • What decisions do companies face in designing, managing, evaluating, and modifying their channels?
    • What trends are taking place in channel dynamics?
    • How can channel conflict be managed?
what is a value network and marketing channel system5
What is a Value Network and Marketing-Channel System?
  • Channel integration characteristics:
    • Ability to order a product online, and pick it up at a convenient retail location
    • Ability to return an online-ordered product to a nearby store
    • Right to receive discounts based on total of online and off-line purchases
slide6

How a Distributor Reduces theNumber of Channel Transactions

1

B. Number of contacts

with a distributor

M x C = 3 + 3 = 6

4

Store

2

5

6

3

= Manufacturer

= Distributor

= Customer

slide7

Distribution Channel Functions

Information

Transfer

Communication

Payments

Negotiation

Physical

Distribution

Ordering

Risk Taking

Financing

what work is performed by marketing channels
What Work is Performed by Marketing Channels?
  • Acquire funds to finance inventories at different levels in the marketing channel
  • Assume risk connected with carrying out channel work
  • Provide for the successive storage and movement of physical products
  • Provide for buyers’ payment of their bills through banks and other financial institutions
  • Oversee actual transfer of ownership from one organization or person to another
channel design decisions
Channel-Design Decisions
    • Push strategy
    • Pull strategy
  • Designing a channel system involves four steps:
    • Analyzing customer needs
    • Establishing channel objectives
    • Identifying major channel alternatives
    • Evaluating major channel alternatives
slide10

Manufacturer

Consumer

0-level channel

Manufacturer

Retailer

Consumer

1-level channel

Mfg

Wholesaler

Retailer

Consumer

2-level channel

Mfg

Wholesaler

Jobber

Retailer

Consumer

3-level channel

Consumer Marketing Channels

industrial marketing channels

Industrial

distributors

Consumer

Manufacturer

Manufacturer’s

representative

Manufacturer’s

sales branch

Industrial Marketing Channels
channel design decisions12
Channel-Design Decisions
  • Analyze Customers’ Desired Service Output Levels
    • Lot size
    • Waiting time
    • Spatial convenience
    • Product variety
    • Service backup
channel design decisions13
Channel-Design Decisions
  • Establish Objectives and Constraints
  • Identify Major Channel Alternatives
    • Types of Intermediaries
    • Number of Intermediaries
      • Exclusive distribution
        • Exclusive dealing
      • Selective distribution
      • Intensive distribution
channel design decisions14
Channel-Design Decisions
    • Terms and Responsibilities of Channel Members
      • Price policy
      • Conditions of sale
      • Distributors’ territorial rights
  • Evaluate the Major Alternatives
    • Economic Criteria
slide16

Manufacturer’s

sales agency

Company

sales force

Selling

costs

(dollars)

SB

Level of sales (dollars)

Break-Even Cost Chart

slide17

Selecting

Training

Motivating

FEEDBACK

Evaluating

Channel Management Decisions

slide18

Corporate

Common Ownership at Different

Levels of the Channel

Types of Vertical Marketing Systems

Administered

Leadership is Assumed by One or

a Few Dominant Members

Contractual

Contractual Agreement Among

Channel Members

slide19

Wholesaler

Retailer

Consumer

Consumer

Conventional Distribution Channel vs. Vertical Marketing Systems

Vertical

marketing

channel

Conventional

marketing

channel

Manufacturer

Manufacturer

Wholesaler

Retailer

channel dynamics
Channel Dynamics
  • Conflict, Cooperation, and Competition
    • Types of Conflict and Competition
      • Vertical channel conflict
      • Horizontal channel conflict
      • Multichannel conflict
    • Causes of Channel Conflict
      • Goal incompatibility
      • Unclear roles and rights
        • Differences in perception
channel dynamics21
Channel Dynamics
  • By adding new channels, a company faces the possibility of channel conflict which may include:
    • Conflict between the national account managers and field sales force
    • Conflict between the field sales force and the telemarketers
    • Conflict between the field sales force and the dealers
channel dynamics22
Channel Dynamics
  • Managing Channel Conflict
      • Diplomacy
      • Mediation
      • Arbitration
  • Legal and Ethical Issues in Channel Distribution
      • Exclusive distribution
      • Exclusive dealing
      • Tying agreements
kotler on marketing24
Kotler on Marketing

Successful “go-to-market” strategies require integrating retailers, wholesalers, and logistical organizations.

chapter objectives25
Chapter Objectives
  • In this chapter, we focus on the following questions about each marketing intermediary:
    • What major types of organizations occupy this sector?
    • What marketing decisions do organizations in this sector make?
    • What are the major trends in this sector?
table 18 1 major retailer types
Table 18.1: Major Retailer Types

See text for complete table

retailing
Retailing
  • Levels of Service
    • Wheel-of-retailing
    • Four levels of service:
      • Self-service
      • Self-selection
      • Limited service
      • Full service
slide28

Broad

Breadth of

product line

Narrow

Value added

Low

High

Retail Positioning Map

Bloomingdale’s

Wal-Mart

Tiffany

Kinney

Shoe

slide29

Classification Of Retailer Types

Narrow Product Line, Deep Assortment

Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items

Wide Variety of Food, Laundry, & Household Products

Limited Line of High-Turnover Convenience Goods

Broad Product Line, Low Margin, High Volume

Inexpensive, Overruns, Irregulars, and Leftover Goods

Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services

Broad Selection, Fast Turnover, Discount Prices

Store Type Length and Breadth of Product Assortment

Specialty Stores

Department Stores

Supermarkets

Convenience Stores

Discount Stores

Off-Price Retailer

Superstores

Catalog Showroom

slide30

Direct Selling

Types of NonStore Retailing

Direct Marketing

NonStore Retailing Accounts for More Than 12% of All Consumer Purchases, and is trending up.

Automatic Vending

Buying Services

slide31

Wheel of Retailing

Mid Price

Mid Status

Mid Margin

Low Price

Low Status

Low Margin

High Price

High Status

High Margin

New Entrants

slide32

Wholesaler

Functions

Why are Wholesalers Used?

Selling and

Promoting

Management

Services & Advice

Market

Information

Buying and

Assortment Building

Bulk Breaking

Risk Bearing

Financing

Warehousing

Transporting

table 18 3 major wholesaler types
Table 18.3: Major Wholesaler Types

See text for complete table

wholesaling
Wholesaling
  • Trends in Wholesaling
    • Narus and Anderson identified four ways to strengthen relationships with manufacturers
      • Sought clear agreement about their expected function in the marketing channel
      • Gained insight into the manufacturers’ requirements by visiting their plants
      • Fulfilled commitments by meeting volume targets
      • Identified and offered value-added services to help their suppliers
slide35

Provide a Targeted Level of Customer Service at the Least Cost.

  • Maximize Profits, Not Sales.

Higher Distribution Costs/ Higher Customer Service Levels

Lower Distribution Costs/ Lower Customer Service Levels

Goals of the Logistics System

logistics systems

Transportation Water, Truck, Rail, Pipeline & Air

Logistics Systems

Order Processing

Submitted

Processed

Shipped

Costs

Minimize Costs of

Attaining Logistics

Objectives

Logistics

Functions

Warehousing

Storage

Distribution

Inventory

When to order

How much to order

Just-in-time

market logistics
Market Logistics
  • Supply chain management (SCM)
  • Value network
  • Demand chain planning
  • Market logistics
    • Market logistics planning has four steps:
      • Deciding on the company’s value proposition to its customers
      • Deciding on the best channel design and network strategy for reaching the customers
      • Developing operational excellence in sales forecasting, warehouse management, transportation management, and materials management
      • Implementing the solution with the best information systems, equipment, policies, and procedures
  • Integrated logistics systems (ILS)
transportation modes

Rail

Nation’s largest carrier, cost-effective

for shipping bulk products, piggyback

Truck

Flexible in routing & time schedules, efficient

for short-hauls of high value goods

Water

Low cost for shipping bulky, low-value

goods, slowest form

Pipeline

Ship petroleum, natural gas, and chemicals

from sources to markets

Air

High cost, ideal when speed is needed or to

ship high-value, low-bulk items

Transportation Modes
slide40

1. Speed.

2. Dependability.

3. Capability.

4. Availability.

5. Cost.

Checklist for Choosing

Transportation Modes